What happens if you can’t make mortgage payments on your house in Memphis? In precarious times, it’s fair to wonder what happens if you find yourself in a situation where you can’t continue to make payments on your house due to extenuating circumstances. There are many reasons why you might find yourself in this situation, especially if you’ve recently lost a job or are dealing with a huge life change such as divorce or health problems. Sometimes, your best-laid plans of buying a house in Memphis and paying the mortgage easily don’t work out.
In fact, foreclosure is an all-too-common ending to many homebuying scenarios. Each month there are hundreds of homes in foreclosure in Memphis, which means that banks are repossessing houses and people like you are finding themselves without equity, without cash, and without a place to live. That doesn’t have to be the case.
There are solutions for homeowners who want to find someone to take over payments on their houses in Memphis. We can walk through the process below. Let’s take a closer look at your options before you need to worry about foreclosure or losing your house.
How Can Someone Take Over Payments On Your House In Memphis?
What Are Assumable Loans?
The first thing you need to do is find out if your mortgage is an assumable loan. If so, that opens up some doors for you in trying to sell your Memphis house. An assumable loan means that you are able to transfer the mortgage to another person, i.e., they assume responsibility for the mortgage. It’s important to note that not all mortgages are assumable loans. Usually, if you have an FHA or VA loan, those are more likely to be assumable. So you’re going to want to confirm that.
You can’t just hand over an assumable loan, however. The lender is going to want to make sure they are transferring the loan to someone they can assume will make a good-faith effort to get caught up on payments and pay the loan in full. So the new borrower will be required to qualify for the loan. The lender will figure this out the same way they made sure you qualified, by checking the borrower’s credit score and debt-to-income ratio in order to figure out the likelihood of their ability to repay the mortgage. The process isn’t very different from the one they’d go through if the person or company were applying for a new loan.
The important thing for the lender is that you’re not going to let you off the hook on repayments until they are satisfied the new buyer will do so. So it’s important that you try not to waste anyone’s time by transferring the loan to someone with bad credit or an inability to repay it. Fair Cash Deal has the ability and financial security to meet this standard and can be an advantageous partner for you if you want to transfer payments on your Memphis house and receive cash for it.
Benefits & Advantages of Finding Buyer to Take Over Loan
There are quite a few advantages that both the seller and the buyer can get when the buyer is taking over the seller’s mortgage through an assumable loan. The biggest advantage comes if the seller’s mortgage interest rate is lower than the current market rates, or perhaps lower than the rate the buyer would be able to get based on their financial history.
For example, if the current market rate is 6.5 percent, but the buyer can take over the assumable loan on your Memphis house at a 4.5 percent interest rate, the buyer has found savings for themselves if they plan on making monthly payments over the longterm. Of course, if the buyer plans to pay off the mortgage after assuming the loan, it’s a moot point.
There are also less closing costs to worry about when you find a buyer to assume your mortgage. Not only is this a positive for the buyer but it is also a very valuable option for the seller. If you sell your house for cash to Fair Cash Deal, there are never any closing costs, so it’s a great way to sell your house and avoid extra fees such as those, including real estate commissions.
If you decide to sell your house on the open market, offering the option of an assumable loan is a good marketing tactic as well. It gives you a leg up with buyers who are looking for these kinds of options and it gives buyers another possible way to finance the sale. It’s also an advantage you can have over other houses for sale in your Memphis neighborhood.
Make Sure You’re Released From Liability
If you decide to transfer payments on your Memphis house to a new buyer, make sure it’s clearly stated in the contract that you are no longer responsible for the loan or any future payments. If you somehow remain tied to the mortgage moving forward and the buyer defaults on the loan, the lender is going to come after you and you’re going to be right back where you started. Potentially in an even worse situation because you have another house at this point or weren’t prepared financially for this.
So make sure if you’re going to participate in a loan transfer that you are able to obtain a release from the mortgage company or lender that clears you of any and all liability.
This also means don’t just make a handshake agreement with someone to take over your payments. Sometimes a homeowner will just let someone else move in and start making payments without any formal agreement or binding contract, or without informing the lender. That is an especially bad idea that can easily go wrong. You never know what might change in that person’s life and if you can trust that they’ll honor your non-binding agreement. It’s always smart to involve all parties, put everything in writing, and make sure you are cleared of all liability.
Sell Your Memphis House As-Is for Cash
You can sell a house with an assumable loan on the open market, but there are a lot of costs and a lot of time concerns that come with that. You’ll still likely have to clean the house, make repairs, stage the rooms, boost your curb appeal, market the property, and offer concessions. And then when the deal is done, a real estate agent is going to want their commission fee, not to mention other closing costs involved.
Fair Cash Deal will take over the payments on your Memphis house and we’ll do it without involving real estate agents, without charging fees, without requiring any repairs or cleaning, without waiting months, and without financing. We will put cash in your hand today to take over the payments and buy your house from you.
The process is so simple. You contact us and let us know your situation. We’ll reach out and get more information or set up a time to meet you or see the property. Then we’ll crunch the numbers to make you a fair cash offer (no lowballs!). If you like the offer, we’ll work with you to transfer ownership of the loan quickly and then put cash in your pockets. You get to walk away without having to worry about the threat of foreclosure or bank pressure.